The Latest P2P News – 7/7/16

P2P News – All The Latest Updates

Hi guys and welcome to our first P2P news blog of the month, as usual we will be giving you a snapshot of the latest news from the P2P world. This week we look at an array of topics from looking at the future of P2P to looking at how P2P performed last year. Missed our last P2P news update? If so, catch up here, in addition, take a look at Michele’s latest post on Real Estate P2P and Crowdfunding Leads Alternative Finance Industry.

P2P Has A Bright Future, Insists Dianrong Founder

Founder and chief executive of China’s peer-to-peer lending platform Dianrong.com, Soul Htite feels that more platforms will collapse in the future.

As mentioned previously in a past P2P news blog round-up, the news of Lending Club’s founder Renaud Laplanche, stepping down from his position following an internal probe over allegedly mis-sold loans has made many question the legitimacy of the industry.

Dianrong’s founder mentioned in a recent South China Morning Postarticle that a system needs to created that nobody will be able to do what Ezubao (a Chinese P2P that defrauded 900,000 investors out of more than 50 billion yuan by offering high interest rates which it was unable to pay) did.

One idea he mentions about is to ask every P2P platform out there to have a custodian bank with which borrowers must have an account.

Moreover, he goes on to say : “The existence of custodian banks also makes sure that capital actually exists and flows to the borrower so that any Ponzi Scheme could be avoided.”

Htite’s company have also been experimenting with blockchain technology, which seems to be a key trend at the moment recently, with quite a few Indian P2P companies also conducting their own research on using the concept.

It seems the future of P2P (not just in China, but on a global level) will be a lot more transparent, as the Diarong example shows by using a custodian bank.

Htite told the South China Morning Post that he believes it is “very normal” to see market bubbles burst and is sure more Chinese P2P platforms will vanish due to failing to raise the money they need to survive.

He stresses that the companies who make industry adjustments will be the ones left standing.

Disruptive P2P JustUs Launches

A new lending platform has launched with plans to raise to raise £5.35m, including £1m on crowdfunding platform Crowdcube. (MEN, June, 2016).

JustUs aims to become a provider of the broadest range of peer-to-peer consumer loans and secured lending.

Financial services entrepreneur Lee Birkett mentioned in the MEN : “I believe we are completely disrupting the status quo with a range of accessible products for borrowers from a comprehensive range of backgrounds and credit history.”

In addition, he stressed this new P2P disrupter is democratic, by the people, for the people. Savers are uninspired by their humdrum returns. JustUS can give customers access to higher returns by bringing them together with a broad mix of consumer, guarantor and secured loan products.

During Beta testing of the JustUs site, it attracted £130m of borrower applications from a marketing spend of just £150,000.

Alternative Finance Continues To Make Progress Despite Slowdown

Data from Cambridge University has shown that P2P lending for SMEs is helping drive continued growth in the alternative finance industry, despite an overall slowdown in the market.

Their research found that the UK online alternative finance industry grew by 84% to £3.2bn in 2015, from £1.74bn in 2014. This is compared to year-on-year growth between 2013 and 2014 of 161%. (CBR, February 2016)

Researchers at the university estimate that P2P business lending, excluding real estate lending, provided the equivalent of 13.9% of new bank loans to small businesses in the UK last year, this was based on 2014 data from the British Bankers Association.

Interested in the research conducted by Cambridge University? If so read more here.

P2P Lending Should Outperform In A Downturn

According to Polar Capital’s Nick Grind, a significant downturn in the global economy should see P2P/marketplace lending funds outperform regular credit markets. (Altfi, June 2016)

His logic is that investment trusts could be buying back their shares to manage the discounts, plus in a downturn you’re going to see spreads widen on a fixed income portfolio.

The attraction of buying of buying P2P GI or one of the others is that in theory you are getting good risk adjusted returns and there is a lot of granularity.

P2P Throwback : 2015 The Year P2P Lending Went Mainstream

Since today falls on Throwback Thursday, we thought we would take a look back at P2P in 2015.

2015 was a landmark year for P2P in this country, with lending of £1.26 billion in 2015 accounting for almost half (47%) of all UK P2P lending.

In addition, consumer lending accounted for almost £1.1 billion of P2P lending in 2015, more than two-fifths (40.6%) of the total. In third place was invoice factoring and financing which, at a third of a billion pounds, accounted for an eighth (12.4%) of total lending. (Assetz Capital, January 2016).

The Big three P2P firms continued to dominate, in 2015 Zopa lent £532 million, Funding Circle were not to far behind but ended the year in second place with £531 million.

RateSetter finished the year with £518 million and came third. The likes of Lendinvest and Wellesley & Co.also had a great year, lending £301 million and £152 million respectively.

What Are Your Thoughts?

Which of our chosen P2P stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it.

Post navigation

In respect of Equity Investments, The House Crowd Limited (FRN 711355) is an appointed representative of Prosper Capital LLP (FRN 453007) ("Prosper"). Prosper is authorised and regulated by the Financial Conduct Authority. Neither the House Crowd Limited, Prosper nor any of their affiliates or group companies provides any advice or recommendations in relation to this website. If you have any doubt about the suitability of any investment marketed by The House Crowd Limited, or you require financial advice, you should seek a personal recommendation from an appropriately qualified financial advisor that does give advice.

In respect of Peer to Peer investments, The House Crowd is authorised and regulated by the Financial Conduct Authority under interim permission number 665205 to conduct peer to peer lending activity in the UK.

Investments are only available to certain specified persons who are sufficiently sophisticated to understand the risks. Investments in property and unlisted shares carry risk and you may not receive the anticipated returns and your capital may be at risk.